The Pound has pushed higher this morning following upbeat private sector data and improved risk sentiment.
Both UK services and manufacturing sector data (PMI) came in better than expected (53.8 vs 53.2 and 47.3 vs 46.7 respectively). This is further evidence the UK economy is performing fairly resiliently at a time when inflation continues to be stubborn. This might give the Bank of England more flexibility on when to make the first rate cut (i.e. they can leave these high interest rates for longer to allow more time to impact on prices) and hence has supported Sterling this morning.
As a result, the GBP/EUR has hit the highest levels since Sept ’23 and the GBP/USD is up nearly 1-cent and close to a 2-week high. Later today, we have the US PMI survey data which may create some further movement in the GBP/USD depending on how far off expectations these come in. That said, movements may be relatively contained if investors opt to wait until tomorrow’s US growth figures (GDP) before taking any large positions.